Huge-volume assets in the form of business stocks are always insignificant for traditional real estate enterprises. In particular, along with the further shrinkage of financial channels and the continuous rise of financing costs, how to prevent stock assets from occupying a lot of funds and promote the turnover of cash flow has become a urgent problem that needs to be solved by real estate enterprises. This embodies the importance of asset securitization. Quite many enterprises place high hopes on ABS and REITs, which are two important means of asset securitization.
WINS Investment is a wholly-funded subsidiary of a listed real estate enterprise Gemdale Corporation （600383.SH）, an important part of the “1+2” strategy of Gemdale Corporation. Since it started its exploration to domestic real estate finance in 2006, WINS Investment has so far become a financial service provider offering real estate fund services to numerous developers and investors in the market.
Wins Investment now possesses its branches in Beijing, Shanghai, Shenzhen and Wuhan, and is equipped with more than 50 senior professionals. With the help of the platform advantage of Gemdale Corporation, and the mature accumulation of Wins in fundraising, investment, management and withdrawal, Wins Investment is now trying to set up a capital platform for multilevel cooperation between small and medium-scale developers and Tier-1 brand developers.
In our opinion, the further landing of innovative financial products of real estate asset securitization, especially REITs, is very suitable for the development status quo of domestic investment environment. Investment channels in the past are inaccessible, so that a lot of people can meet their demands for investment and finance only by buying housing property. Moderately guiding them into REITs products would be beneficialfor establishing and normalizing robust investment channels, and would be very significant for urban renewal and renovation, development of new-type office and consumption upgrading. Asset securitization and other innovative financial products also have stricter requirements for the investment choices, operation and management and other aspects of assets. Normal financing products of the capital market, to a greater extent, can normalize the healthy and upward development of real estate projects.
A lot of enterprises face much pressure from the market this year. For example, the amount of funds is always tightened up, and the financing cost rises. The land supply is reduced and competition for land price is fierce in Tier 1 and Tier 2 cities. The destock pressures among different cities are polarized, and so on and so forth. It is obviously detected that most real estate enterprises in Tier-1 cities and some key Tier-2 cities tend to be more active than before in the merger of stock projects. Moreover, a lot of acquiring companies of stock projects are real estate enterprises this year.
In addition,the real estate industry pays more attention to asset management, urban renewal capacity, comprehensive capital operation capacity, trans-boundary innovative capacity.In May of this year, in cooperation with Harvest Capital, Wins Investment participated in the investment in Shanghai “No. 8 Bridge” Project and played an important role in the financial innovation of this project; smoothly acquired the unanimity letter issued by Shanghai Stock Market for “Harvest Gemdale No. 8 Bridge Assets Backed Security”, and successfully issued the security.
Shanghai Bridge 8 Project, is not only the first ABS operation of cultural creativity park in China, but also an innovative operation of light assets, with a strong influence and impetus for the financial innovation of urban regeneration “light asset” projects on the future real estate market, with the general trading consultant and plan manager being WINS Investment and Harvest Capital respectively.
Urban regeneration will become an important direction of real estate market in Chinese Tier 1 and key Tier 2 cities, while asset securitization and other innovative finance models will boost the upwarddevelopment of urban regeneration and holding-type real estate market. WINS Investment will continue to maintain its inputs in the investment and operation of real estate financial innovation and urban regeneration, boost the healthy development of Chinese real estate finance, and create better returns for investors.
With regard to real estate regulation, since last year, various major indicators of real estate markets have shown a trend of “first remaining high and then leveling off”. Althogh the accumulative year-on-year growth of total areas and amount of commercial housing sold declined on a monthly basis, the effect has been appearing along with the continuous intensification of the regulating policies. The sales growth of Tier 3 and Tier 4 cities has been slowed down obviously. The velocity of year-on-year growth of such indicators as sales, investment, new commencement and land purchase has started to decrease. Various policies of real estate regulation in this round have been coming into effect gradually.
In the second half of 2017, the entire real estate market will develop gently under differentiated regulation policies among various cities. In the context of emphasizing and adhering to the residential attribute of housing, the regulation policies of Tier 1 and major Tier-2 cities will continue to maintain a trend of tightening, and the force of limitation on purchase and loan and various supervisory measures would not become relaxed. The mode of “limitation on sales” which has been in operation since the beginning of 2017 would possibly be further expanded among various cities and would work on always overheated demands of investment and speculation. “Destock” will still be the theme of Tier-3 and Tier-4 cities.
As a whole, the number of cities which are expected to promulgate further tightening policies in the future would decline gradually, and the policy density will also show a phased decline. The entire market would become more and more rational, and the tightening policies in some regions would enter a phase of minor repair and amendment. In addition, in the context of the continuance of various regulating policies and the all-round tightening of funds, the land price of some cities is expected to face some more reasonable adjustments, thus resulting in the increase of occurrence of reasonable investment opportunities.
In response to the rapidly-changing industry and market environment, WINS Investment will continue to further promote “investment + agency construction”, equity investment, asset merger, asset securitization and other innovative business on the basis of its advantageous business, and will effectively combine the acquisition of held property with asset securitization and other innovative financial products to create a closed loop from investment to innovative financial products. Based on its accurate mastery of market cycle and urban difference, relying on the highly qualified channels and the strength of risk control owned by WINS, WINS Investment will exploit and lock more highly qualified projects and investment opportunities in the market, trying to offer a better return for investors.
Wins Investment has accumulatively exerted management over 1 USD fund and dozens of RMB funds since it launched the first standardized real estate USD fund in China with UBS in 2008. By the end of 2016, the accumulative amount in investment and scale of management of WINS Investment had been over RMB 30 billion.
In the future, Wins Investment will give full play to its role in linking the platform of Gemdale Corporation and the capital of institutional investors and small and medium-scale developers; Wins investment will closely cooperate with institutional investors in such fields as financial innovation, asset acquisition and fundraising; Wins Investment will try to develop jointly with small and medium-scaledevelopers, promote the efficiency of fund allocation and achieve advantage complementation and mutual benefits through cooperation.
